Samsung Electronics Co. beat Intel Corp. last year, keeping its throne in the global semiconductor market despite a steady decrease in memory chip prices from the second half of last year. The South Korean electronics giant overwhelmed Intel in terms of operating profit as well, retaining its title as the best blue-chip manufacturer in the world.
Intel posted US$18.70 billion (20.96 trillion won) in sales in the fourth quarter of 2018. The figure was slightly down from US$19.2 billion (21.52 trillion won) in the previous quarter but it rose by 9 percent from US$17.1 billion (19.17 trillion won) a year earlier, according to industry sources on Jan. 27. In comparison, the memory chip sales of Samsung Electronics, which will present the final results on Jan. 31, are estimated at 19 trillion won (US$16.95 billion) in the fourth quarter last year.
Intel outpaced Samsung Electronics in the fourth quarter of 2018 but Samsung Electronics seems to far surpass Intel on an annual basis and maintain the number one spot for a second successive year.
Intel announced that its total sales stood at US$70.8 billion (79.37 trillion won) last year but the figure fell short of 85.90 trillion won (US$76.63 billion), Samsung Electronics’ minimum memory chip sales estimate last year
Samsung Electronics is also expected to surpass Intel in terms of operating profit. In fact, the operating profit of Intel came to US$6.20 billion (6.95 trillion won) in the fourth quarter of 2018, falling short of Samsung Electronics’ projection range in the semiconductor business from 7.30 trillion won to 8.50 trillion won (US$6.51 billion to US$7.58 billion).
In addition, Samsung Electronics is forecast to have an operating margin of around 40 percent in the fourth quarter of 2018 and outpace Intel with 33.3 percent.
However, Samsung Electronics, which is a “defending champion,” and Intel, which is the traditional power that ranked first for 24 years since 1992, are expected to intensely battle for the top spot this year. Market experts believe that the price of memory chips will continue to show a downward trend until the first half of this year so Intel is likely to stay ahead in the first part of the race.
Intel presented its sales projections for the first quarter of this year at US$16 billion (17.94 trillion won) and the total sales projections for the whole of this year at US$71.50 billion (80.10 trillion won).
In contrast, nine South Korean securities firms’ estimates for Samsung Electronics’ memory chip sales for the first quarter of 2019 range from 15.2 trillion won to 17.5 trillion won (US$13.6 billion to 15.61 billion) and its total sales for this year from 66.3 trillion won to 78.2 trillion won (US$59.14 billion to US$69.76 billion), falling short of the figures of Intel.
However, some point out that it is too early to jump to a conclusion as the possibility that the memory chip market might recover early is recently increasing and the delay of Intel’s process conversion can be extended further. On top of that, Intel sees a slowdown in its growth in the Chinese market in the aftermath of the trade war between the United States and China.